S&P cuts 2016 And 2017 Eurozone GDP And Inflation forecasts

Standard & Poor's economists said they trimmed their growth projections for the eurozone economy to 1.5% this year (versus 1.8% previously) and to 1.6% in 2017. In the report published today, S&P's remarks that the sharp fall in equity prices expressed fears about slower growth in emerging markets, especially China, and possibly in the U.S. as early as the second half, with the eurozone's recovery running on only a single engine-consumer demand. 
"Yet, since the end of February, global market sentiment has started to improve again; and in Europe, the set of new accommodative measures that the European Central Bank (ECB) announced was well-received," said Standard & Poor's chief economist for Europe, the Middle East, and Africa, Jean-Michel Six.  
S&P mades more substantial revisions to headline inflation forecast, now down to 0.4% for this year–versus 1.1% previously–that we believe will reach 1.4% next year (1.5%). "We continue to believe that the recovery's underlying fundamentals are more resilient than the financial markets have recently suggested, but not so strong as to bring growth back to its pre-crisis flight path," Mr. Six said. 
In addition, S&P stresses that central bank actions are having a diminishing impact on inflation and growth prospects, partly because some of the battles they're trying to fight are beyond their reach (low commodity prices, erratic swings in emerging markets currencies), and partly because they lack "air support" from governments, such as structural reforms to boost competitiveness and the efficiency of labor markets.